Monthly Archives: September 2014

I have Facebook friends who regularly “like” posts by Food Babe Vani Hari. She has a cult-like following of people who listen to her as she screams bloody murder about all sorts of food. FoodBabe, known to some as a “food activist,” loves to talk about all the chemicals and toxins in the food we eat. Sounds great, right? We all need to be more aware of what we’re eating!

But it’s not quite so simple. Food Babe (Fraud Babe?) isn’t doing this out of the goodness of her heart. This is a business, people. Paranoia and hysteria bring readers, readers bring revenue. It’s just that simple.

I’m not against anyone making a money, but I think it is important to look at how that money is made and what actually makes the “expert” an expert. More particularly, is someone a blogger who claims to be an expert? Or is someone an actual expert who just happens to blog?

FraudBabe is a self-annointed expert (who as you will see, is no expert at all) who makes money via pay-per-click advertisements (you click on an ad, she gets paid), affiliate links (she makes money when you click and buy), the sale of her “eating guide,” and speaking engagements. Read More →

Would you recognize the clues that you (or your client) have been ripped off by one of your employees? Or would management conduct business as usual, blindly trusting the employees?

Companies make the mistake of not actively searching for fraud. They tend to trust their employees and trust the procedures in place to safeguard company assets. It may be good business to trust employees and empower them to make real contributions to the growth of the company. However, it is not wise to turn a blind eye to signs that a trusted employee may be stealing.

An unexpected increase in affluence may signal an employee with sticky fingers. Favorite toys of fraudsters include new Harley Davidson motorcycles, luxury vehicles, and high-end watches. Those things are easy to spot, although management doesn’t always think through the implications.

Behavioral changes can also point toward a guilty conscience. Changes in activities such as starting or quitting time, without any obvious business reason, could be problematic. Non-compliance with established policies and procedures can also be problematic. Read More →

Via Amy Alkon, the stupidity of this speaks for itself. Kahler Nygard had “SSSS” on his boarding pass, which means he should have gotten extra groping from TSA in the security line BEFORE his flight. Someone decided he didn’t get enough groping, so TSA met him when he exited the plane at his destination. Nygard rightfully declined the groping in Denver… there was no logical reason to grope him AFTER he was done flying and couldn’t possibly blow up the plane he just left.

This may be old news to some of you, but I’m finally getting around to writing about it. In June 2014, the receiver in the Zeek Rewards Ponzi scheme case sued the infamous MLM lawyer Kevin Grimes (and his law firm) for legal malpractice, negligence and breach of fiduciary duty. The lawsuit initiated by receiver Kenneth Bell names Kevin Grimes and the law firm Grimes & Reese PLLC, and alleges damages of $100 million. (A separate lawsuit against Howard Kaplan also makes similar claims.)

The lawsuit alleges that Grimes knew or should have known that Zeek Rewards “…was perpetrating an unlawful scheme which involved a pyramid scheme, an unregistered investment contract and/or a Ponzi scheme.”

Background

The Securities and Exchange Commission sued RVG Venture Group, LLC (dba ZeekRewards) in 2012, alleging that it was a $600 million Ponzi scheme (also called pyramid scheme). Of course, up until that point, participants in the multi-level marketing industry were claiming that ZeekRewards was a legitimate and legal MLM. (That’s what the lawyers said, anyway!) The company was forced into receivership later that year, with the receiver seizing assets to attempt to pay back victims of the scheme. Read More →

I have researched multi-level marketing companies for nearly a decade. During that time, I came to the conclusion that the vast majority of participants fail. What does that mean? 99% or more lose money. Since the participants are largely getting in because of the “business opportunity” to “earn unlimited income” and find “financial freedom,” failing to turn a profit is indeed a failure.

The alleged fraud is a billing scheme, in which the company made fraudulent disbursements. One component of the fraud was a shell company scheme. The lawsuit claims that David Colletti and Pamela Colletti created a fake company which billed MillerCoors for goods and services never provided. The other component was an overbilling scheme, in which legitimate companies billed MillerCoors for goods and services not received. The participants in the schemes allegedly shared the funds paid by MillerCoors. Read More →

My idea of a good time: Digging through boxes of documents for hours on end, looking for that smoking gun that proves an employee was stealing from a business.

An attorney’s idea of a good time: Going to court with the expert witness who proved the employee was stealing, and burying the guilty party with a verdict in favor of the client.

The client’s idea of a good time: Having employees who don’t steal from the business in the first place.

Let’s face it, dealing with employee theft is no picnic. And while I certainly don’t mind making a living busting thieves, it’s always disheartening to see business owners put in a bind because of someone’s sticky fingers. Read More →